The present invention relates to financing renewable energy equipment and more particularly to the ability to increase the likelihood that a consumer will repay a loan for such renewable energy equipment in accordance with an agreement to pay such a loan or will make payments for power generated by renewable energy equipment in accordance with an agreement for the purchase of such power.
Electricity or power is an essential part of modern life. In residences, in businesses, in institutions and in other locations, consumers use electricity in a variety of ways. Utilities typically supply power to consumers as needed. FIG. 1 illustrates a diagram of a power system of the prior art. As is shown, the utilities deliver power generated by power plants through a network of transmission and distribution lines. This network is hereinafter referred to as the “power transmission and distribution grid,” “the electric grid,” “the grid” or “power grid.” Electricity production, demand and costs are discussed in detail in numerous publications. For this reason, these details will be described herein. Suffice it to say, renewable energy is a practical and environmentally conscious alternative to traditional utility production. One of the more desirable renewable sources is solar power. For one thing, local solar energy can essentially be harnessed in most developed country locations with solar access. For another, solar equipment consumes no fossil fuels and generates no air pollutants. The use of solar power is generally regarded as environmentally safe. Utilities in many States are required (or voluntarily do so) for public policy reasons to credit or actually buy excess power generated by a consumer. General rules and requirements of such a purchase are not discussed herein. Suffice it to say, solar energy is quite desirable and beneficial to a consumer. Unfortunately, solar power equipment is quite expensive for a consumer. While the Federal and State incentives are significant, the remaining costs for the purchase of solar equipment may be beyond the amount of cash a consumer has on hand or wishes to commit.
To date, there are limited financing options for the consumer of solar power equipment. These options are predominantly based on traditional financing products known as a mortgage, a secured loan in real property or deed of trust. Such products rely on a security interest in the consumer/borrower's real property. There are other financing options. Secured personal property loans (sometimes referred to as chattel mortgages or loans) and unsecured personal loans are also available for the purchase of solar equipment. Secured personal property loans are typically secured by the personal property. Unsecured loans are not secured at all.
There is yet another financing option available for the consumer. It is known as a Power Purchase Agreement (“PPA”). There are several varieties of a PPA. One example of a PPA is offered by Citizenre company (See Domain page: renu.citizenre.com). In a typical PPA arrangement such as that offered by Citizenre, a party known as the PPA Investor purchases, installs and maintains solar equipment on a consumer's premises. The PPA Investor owns the equipment. In exchange for such equipment, the consumer agrees to purchase power generated by the solar equipment for a period of time (e.g., up to 25 years). A PPA may include is a lease. Depending on the arrangement, PPA might be treated as a capital lease or operating lease. In a PPA, the consumer makes no investment, needs to perform no repairs, need not wait for any rebates and locks in prices for power. The PPA Investor also receives benefits from this arrangement. The PPA Investor may receive financial benefits including investment tax credits (ITC), accelerated depreciation, rebates, subsidies and possibly other benefits (besides consumer payments).
The financing options discussed above (loans, PPA, etc.) unfortunately have disadvantages. The main disadvantage is that there is really no means by which the lender or PPA investor (PPA is a form of financing, in which the PPA investor is a lender) may insure, or increase the likelihood, that the consumer will repay a loan, i.e., make payments for power purchased under a PPA agreement (both lender and PPA investor are also lending entities). Currently, the only threat or incentive for timely payment is a non-judicial foreclosure for real property, a judicial foreclosure for real property repossession for personal property or a breach of contract for violating the agreements behind a PPA. Traditionally, foreclosure and/or repossession require taking possession (physically) of the collateral in question. These procedures, however, are time consuming and costly. For matters involving personal property, a creditor may repossess (also known as self-help) described collateral from a consumer without resorting to the courts as long as it does not involve breaching the peace. The Uniform Commercial Code (U.C.C.) Article 9 regulates the manner in which secured creditors exercise self-help repossession to recover collateral (goods) after a default. Some states have enacted statutes governing notice requirements in consumer credit transactions that may require the creditor to send notices in connection with repossession.
For certain types of personal property such as automobiles, there exists a method or mechanism by which a creditor may increase his/her chances of receiving payments under specific financing arrangements. The method or mechanism involves a starter interrupt device. Passtime Corporation and Payment Protection Systems, Inc. (See passtimeusa.com and ppsontime.com) are companies that offer such devices. Such devices are used in automobile financing or leasing agreements to ensure repayment. A starter interrupt device merely prevents an owner or lessee from starting a vehicle until he/she has made an incremental payment. The device functions to “interrupt” electricity flow from vehicle starter to its ignition (making the vehicle inoperable). There are different types of starter interrupt devices. The more simple devices use activation codes to permit vehicle use. A creditor supplies the codes after the creditor receives a periodic payment from the owner/lessee. More sophisticated devices incorporate GPS tracking technology and other features. U.S. Pat. Nos. 6,195,648, 6,828,692, and 6,870,467 are examples of vehicle interruption devices/systems. The advantage of using a starter interrupt devices is there is generally no interaction between creditor (and its agents) and the consumer when the device is used. A direct confrontation with the consumer is therefore minimized. Consequently, the devices appear to reduce the likelihood of a breach of the peace. State law ultimately determines permitted use and operation.
Without the use of a starter device or other means to access personal property remotely such as the PV system (that is subject to financing), a lender will likely require direct access to the subject property to prevent a consumer from using such property until he or she has made the appropriate payments. In order to directly access personal property, a lender may require the permission, power or authorization to enter a consumer's premises (real property) and/or disable the personal property of the consumer to discontinue the use of such personal property.
Utilities, for example, typically have the power and authority to enter the premises of a consumer and access the power equipment and/or discontinue power supply in the event that a consumer has failed to make a payment (utilities are required to follow rules set forth by the State PUCs concerning shut-off). Such power and authorization is provided in the published tariff agreements between a utility and consumer for power supply. The threat of utility service shut-off provides a real incentive to make timely payments to a lender. The same incentive holds true for the other companies including the telephone company. However, lenders currently do not have the power and authorization, like a utility, to enter a consumer's premises and access personal property such as renewable energy CPE under the existing financing arrangements between lender and consumer.
In short, starter interrupt devices appear to be quite advantageous for a creditor involved in a vehicle financing arrangement. However, there are currently no devices, systems or methods used to enable the lender (e.g., creditor, PPA Investor) under a financing agreement for renewable energy equipment to increase the likelihood of receiving payments from a consumer. Further, there is no means by which a lender has authorization to access the renewable energy consumer premises equipment in the event a consumer fails to make a period payment under the financing arrangement.
It would be desirable to provide a method, system and/or agreement that would overcome the disadvantages described above.